CAF-7 · Chapter 1 · Question 3 of 15
National income is steadily declining, consumer demand for luxury goods has dropped significantly, and companies are beginning to halt their expansion plans. Which stage of the economic cycle is the country most likely experiencing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Recession
Explanation
A recession is characterized by a continuous decline in national income from one period to the next, accompanied by falling consumer demand and reduced business investments.
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